Jockeying to become a national leader in the long-term-care insurance business, Blue Cross and Blue Shield of the Rochester (N.Y.) Area has acquired MedAmerica Insurance Co., a private, for-profit insurer, from the parent of Blue Cross of Western Pennsylvania for $11.3 million.
The price included $9.6 million of MedAmerica's assets and equity.
MedAmerica, formerly Trans-General Life Insurance Co., has licenses to sell insurance in 38 states and the District of Columbia. Veritus, which operates Blue Cross of Western Pennsylvania, owned MedAmerica through its Trans-General Life and Casualty Group subsidiary.
"The acquisition of MedAmerica was a cost-effective way for us to obtain the state operating licenses we need to expand our long-term care insurance business into new markets without relying on other insurance companies," said Howard Berman, president and chief executive officer of the Rochester plan.
The acquisition is meant to hike sales for the Rochester plan's subsidiary, Finger Lakes Long Term Care Insurance Co. The company's Care-Directions product line is sold in several out-of-state markets, including regions of Delaware, Florida, Michigan and Pennsylvania.
Before the MedAmerica acquisition, CareDirections had to be marketed to out-of-state purchasers through joint ventures with insurance companies operating in those states.
Blue Cross and Blue Shield of the Rochester Area, Finger Lakes Long Term Care Insurance Co. and Med-America are members of the Finger Lakes Cos., a group of health and employee benefits products.